Donald Trump has come back into office with an economic plan that is a three-legged stool. (We don’t discuss politics, but we do discuss economic policies that can impact your portfolios.) One leg of his plan is regulatory reform; the second is tax reform; and the third is his desire to have high tariffs to make it difficult for Americans to buy goods from international companies. The biggest change is in the size of his ambitions and the order in which he has decided to tackle his priorities.
The market has been flip-flopping for a while now, and while most seem not to notice, I am really getting tired of it. If one pays attention only to the S&P 500 index, then it may not seem like there is any inconsistency. This index, which many use as that proxy for the market, just keeps going up quarter after quarter, or at least it has over the last couple years. However, as I have said more times than I can count, it is what happens underneath the surface that really tells an investor what is happening.
THE COINCIDENCES IN LIFE ARE AMAZING. I was a young economics student when the Soviet Union began to collapse, and it was fascinating. We had a visiting professor from Moscow teach a class on the economics of communism, which was one of the best classes I took in college. I was so fascinated that I accidently…
These are the steps to financial wellness. Like physical wellness, they are more of a journey than a destination. In both cases it is an ongoing process, and there will be ups and downs, forward progress and setbacks. When the setbacks happen, we must brush ourselves off and get back on course.
Diversification in investing is one of the most sacred yet most misunderstood concepts. To some degree this is on purpose. One should never forget that Wall Street is in the transaction business: The more transactions an investor makes, the better, and no concept has led to more transactions than diversification. Real diversification, however, is about carefully selecting investments that are truly different and will likely do well under different circumstances.
